Strengthening Loan Structures in LAS: How Lenders Are Addressing RBI’s Concerns Around Evergreening
Darpan Samir Tanna
Building 50Fin | Digitising Secured Credit for Investors and Lenders
Loans Against Securities (LAS) has become a cornerstone of secured credit - enabling borrowers to unlock liquidity against their portfolios while preserving long-term wealth creation. With increasing adoption, the segment has also attracted regulatory scrutiny, particularly around the risk of evergreening - where loan obligations are indefinitely extended without a clear repayment end-state.
In response, lenders have shifted decisively towards disciplined structures with fixed tenures and clear exit events, fully aligned with the Reserve Bank of India’s expectations. And powering this transition behind the scenes is purpose-built technology - the kind that companies like 50Fin are proud to enable at scale.
What Is Evergreening - and Why It Matters in LAS
In traditional LAS models, loans could be extended or topped up repeatedly - especially when the underlying securities performed well. While this was convenient for borrowers, it also carried the risk of delayed stress recognition, particularly when the line between liquidity support and long-term financing became blurred.
Reserve Bank of India (RBI) ’s concern is rooted in systemic transparency: credit must reflect underlying borrower strength and must not rely solely on appreciating collateral to justify ongoing disbursements.
The Structural Shift: Fixed Tenures and Defined Repayment Paths
In today’s LAS market, lenders are moving towards tenure-bound structures - typically ranging from 3 to 6 years - after which:
Borrowers must either repay the loan in full or settle it via pledged asset liquidation.
This ensures loans don’t remain open-ended and that repayment behavior is tracked over a well-defined lifecycle. It also reinforces LAS as a tool for liquidity access, not a substitute for term financing.
Top-Ups Still Supported, But With Clear Boundaries
Top-ups remain an essential feature of LAS, allowing borrowers to respond to market opportunities and margin requirements. However:
Top-ups no longer impact or extend the maturity date of the original loan.
This creates a clean separation between liquidity management and repayment discipline, satisfying both borrower flexibility and regulatory intent.
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How 50Fin Powers This - End to End
At 50Fin , we’ve built the technology rails that allow lenders to enforce fixed tenures, manage top-ups within rules, and maintain audit-ready repayment timelines - automatically.
Our platform supports:
By embedding these controls directly into the product, we ensure that regulatory alignment isn’t just a manual oversight task - it’s part of the platform DNA.
RBI’s Expectations, Operationalized
RBI’s position has been clear:
50Fin ’s infrastructure is built to help lenders meet and exceed this standard - not just in letter, but in spirit.
A Sustainable Model for LAS at Scale
The evolution of LAS into a structured, tenure-bound product is not just a compliance requirement - it’s a strategic move that ensures this credit line remains sustainable, scalable, and regulator-ready.
With platforms like 50Fin at the backend, lenders can now combine product flexibility with structural discipline - enabling faster disbursals, better governance, and long-term customer trust.
Early-stage Investments @ Arali Ventures | B2B Fin-Tech, Healthtech, and Sustainability
1wLAS only works when infra makes discipline unavoidable — good to see this being built right! 👏